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BMW Settles FTC Charges

March 24, 2015

WASHINGTON — BMW of North America has agreed to settle Federal Trade Commission charges that its MINI Division violated the Magnuson-Moss Warranty Act by telling consumers that BMW would void their warranty unless they used MINI parts and MINI dealers to perform maintenance and repair work.

In an administrative complaint, the FTC alleged that BMW, through its MINI Division, violated a provision in the Warranty Act that prohibits companies from requiring that consumers — in order to maintain their warranties — use specific brands of parts or specified service centers, unless the part or service is provided to the consumer without charge.

“It’s against the law for a dealer to refuse to honor a warranty just because someone else did maintenance or repairs on the car,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “As a result of this order, BMW will change its practices and give MINI owners information about their rights.”

The proposed order settling the FTC’s complaint prohibits BMW from violating the Warranty Act and the FTC Act in connection with any MINI Division good or service. The settlement also bars the automaker, in connection with the sale of any MINI Division good or service, from representing that, to ensure a vehicle’s safe operation or maintain its value, owners must have routine maintenance performed only by MINI dealers or MINI centers — unless the representation is true and BMW can substantiate it with reliable scientific evidence. Also, the settlement requires BMW to provide affected MINI owners with information about their right to use third-party parts and service without voiding warranty coverage, unless BMW provides such parts or services for free.

The FTC vote to accept the consent agreement package containing the proposed consent order for public comment was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning March 19 and continuing through April 20, 2015, after which the FTC will decide whether to issue the order on a final basis.

To read the full complaint, click here.

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